Rising USGC sour prices prompt more imports: In the LOOP

US crude imports into the Louisiana Offshore Oil Port appear to be on an upswing in May alongside the recent increase in regional sour crude prices.

About 3.95 million barrels of crude was imported into LOOP in the first decade of May, or roughly 395,000 b/d, according to the most-recent US Customs Bureau and S&P Global Platts Analytics data, compared with an average of 327,000 b/d in the first four months of 2018.

Roughly half of those barrels were Basrah Light and Basrah Heavy imported from Iraq while the balance comprised Argentinian Escalante, Kuwait Export Crude and Mexican Maya barrels.

Marathon imported 2.4 million barrels of that amount while ExxonMobil and Trafigura imported about 975,000 barrels and 545,000 barrels, respectively.

The uptick in crude imports at LOOP coincides with a recent increase in regional sour crude prices.

By midday Monday, the US Gulf of Mexico offshore grade Mars was heard bid-ask at a 65 cents/b-$1/b premium to cash West Texas Intermediate at Cushing, Oklahoma. That put its value somewhere around plus 70 cents/b to cash WTI compared with plus 45 cents/b at the beginning of May and minus 60 cents/b at the beginning of March.

The increases have been due in part to scheduled maintenance on Shell's US Gulf of Mexico Mars and Ursa platforms, which began in late March and continued into at least mid-April.

Other regional sour grades similarly have risen. The medium sour blend LOOP Sour ended last week 75 cents/b above its value at the beginning of March while Southern Green Canyon is up $1.35/b over the same time period, S&P Global Platts data show.

The hike in prices and increasing refinery runs ahead of the driving season are likely boosting regional imports, particularly of heavy and medium sour grades, favored by regional refiners despite booming production of light sweet crude in the US.

Data from Platts cFlow trade flow software show another four VLCCs likely headed to LOOP from Saudi Arabia, Iraq and Singapore. The tankers include the Aquitaine, FPMC C Melody, New Laurel and Sahba, which are expected to arrive between Monday and June 16, the data show.

The 'In the LOOP' Americas crude oil wrap runs each Monday in Crude Oil Marketwire, North American Crude and Products Scan and on the Platts Global Alert. You can read the FAQ: USGC LOOP Sour crude here and find the full special report LOOP Sour Crude: A benchmark for the future here. Also be sure to download our LOOP app by searching for 'Platts LOOP' in your app store.